* Equities slip as risk appetite wanes
* Platinum touches lowest since May 21
* Palladium hits near two-week low
* Gold specs raise net long position in week to June 12
(Adds comments, detail; updates prices)
By Karen Rodrigues
BENGALURU, June 18 (Reuters) - Gold prices were mostly
steady on Monday, holding near a 5-1/2-month low touched in the
previous session, as a stronger dollar offset support from an
ongoing trade dispute between the world's two largest economies.
Spot gold was holding at $1,279.30 per ounce at 0734
GMT. The metal touched its weakest since late December at
$1,275.01 an ounce on Friday.
U.S. gold futures for August delivery were up 0.3
percent at $1,281.70 per ounce.
"The U.S. dollar strength is weighing on investor sentiment
at the moment rather than any concerns about weaker economic
growth due to the trade tensions," said ANZ analyst Daniel
Hynes.
The dollar index , which measures the greenback
against a basket of six major currencies, edged up 0.2 percent
to 94.985, hovering close to a seven-month high touched in the
previous session.
U.S. President Donald Trump on Friday said he was pushing
ahead with hefty tariffs on $50 billion of Chinese imports, and
the smouldering trade war between the world's two largest
economies showed signs of igniting as Beijing immediately vowed
to respond in kind.
Gold is often used by investors as a hedge against political
and financial uncertainty.
"Risk appetite will likely stay weak into the trading day
ahead following intensified trade concerns," OCBC said in a
note.
Meanwhile, Asian shares fell to a 2-1/2-week low on Monday
after Trump cranked up the trade tensions with China.
South Korea and the United States are expected to announce
the suspension of "large-scale" military drills this week, with
the provision that they would restart if North Korea failed to
keep its promise to denuclearise, news agency Yonhap said on
Sunday.
Spot gold may break support at $1,277 per ounce and fall
more towards the range of $1,258-$1,268, Reuters technical
analyst Wang Tao said.
Hedge funds and money managers raised their net long
position in COMEX gold by 6,506 contracts to 64,572 contracts in
the week to June 12, U.S. data showed on Friday. This was the
highest net long position in gold since late April.
Speculators also raised their net long position in silver to
the strongest in 6-1/2 months.
Meanwhile, silver was up 0.1 percent at $16.53 per
ounce.
Platinum fell 0.6 percent to $881.74 an ounce, after
touching its lowest since May 21 earlier in the session.
Palladium was 0.3-percent lower at $983.50 an ounce.
It hit a near two-week low during the session.
(Reporting by Karen Rodrigues in Bengaluru
Editing by Joseph Radford and Richard Pullin)